It has been difficult to find value in the stock market. The Nasdaq lost 33.1% while the S&P 500 declined 19.44% in 2022. Although the two top indices made a comeback at the beginning of 2023, they are still under pressure as rising interest rates have hurt stock prices. In the current market, investors must exercise extreme caution because the U.S. Fed has promised to fight inflation with additional rate increases, which might put even more pressure on stocks. Capital shifts from stocks to bonds as rates rise. The central bank’s hardline monetary policy stance has been maintained as the most recent CPI, PCE, and PPI figures indicate the greatest inflation in decades.

Companies in the food and energy sectors have done well in the current economic climate, as rising prices are a result of the conflict in Ukraine, post-pandemic supply chain problems, and other causes. In addition to being a food company, Muscle Maker, Inc. (NASDAQ:GRIL) is much more.

On March 24, the price of the small-cap stock was $1.03, which equaled a market capitalization of $29.612 million.

Description of the Company 

On its website, Muscle Maker promotes its “healthier for you” brands. A Hawaiian poke bowl concept is called pokemoto. To accommodate different dietary needs and constraints, SuperFit Foods offers freshly cooked subscription-based meals in over 150 different programs. With a franchising model, GRIL is extending its presence across the United States.

The company’s interests extend beyond its consumer food items and franchising program, though.

GRIL Is Also a Commodity Business

The Securities and Exchange Commission received GRIL’s Form 8-K on November 18, 2022, along with a press statement announcing the creation of Sadot LLC, a new wholly-owned subsidiary. A significant agreement between Muscle Maker, Sadot, and AGGIA was also mentioned in the petition.

The creation of a complete, international food corporation is Sadot’s aim. Synergy is produced through GRIL and Sadot’s agreement. Using Sadot’s position as an international shipping and trading company for agricultural commodities in the markets for soybean meal, wheat, and corn, the products will increase the company’s ability to access GRIL’s clients.

Through this arrangement, AGGIA manages Sadot’s daily activities. Results were seen right away thanks to AGGIA’s proficiency in agricultural product shipping, trading, and distribution. The connection is outlined in the public services agreement signed on November 14, 2022, by GRIL, Sadot, and AGGIA. It is a pay-for-performance arrangement in which AGGIA receives board seats and shares in exchange for following a predetermined financial contribution plan.

Muscle Maker stated Sadot LLC collected $54.19 million in income in November 2022 from 26 agricultural commodities shipping transactions spanning seven nations in a press statement dated December 12, 2022.

By engaging in M&A activity, GRIL significantly widened its market penetration beyond the food and franchise industries, building a diverse agricultural commodity business from production to consumption as well as interests and skills in logistics.

Significant Revenues

Investors received additional great news on March 1, 2023, when GRIL announced large revenues. CEO of GRIL, Michael Roper, stated, “We are extremely pleased to have achieved shareholder approval for the Services Agreement between Sadot and AGGIA and related items. Today’s results mark the beginning of a new era in our planned growth cycle. The AGGIA team brings deep expertise to our new business segment, including sustainable farming, agricultural commodity shipping, and trading and distribution. Sadot’s performance to date of over $200 Million in revenue in the first three months of operation is proof positive of the benefits of executing the strategic relationship and addition to our businesses.”

With GRIL trading at $1.03 per share on March 24 and a market size of $29.612 million, Sadot’s contribution to revenue could indicate that the stock is currently being undervalued by the market.

The price had increased by three times since the middle of November 2022, when the most recent earnings caused investors to sell their GRIL stock.

GRIL increased from 30 cents on November 14, 2022, to $1.525 on March 3, a 408% increase in less than five months. Over the time frame, GRIL shares have had a technical breakout to the upside with higher lows and higher highs.

As of March 24, Muscle Maker stock has a technical “Buy” rating from Barchart, a technical website that covers markets across all asset classes.

The fundamentals point to a higher share price, despite the fact that Barchart’s buy rating is only technical. GRIL shares should be on your radar as an investment due to the agreements between Sadot, the fully owned subsidiary, the AGGIA partnership, and the most recent revenue reports. A considerably higher stock price is supported by the maintenance of existing revenue levels.

Meanwhile, GRIL was corrected by the most recent profit figures. As of March 24, the stock has fallen 32.5% from its March 3 highs. GRIL released its Q4 and full-year 2022 results on March 21. Highlights included a total income of $161.7 million, the establishment of a new wholly-owned subsidiary called Sadot LLC in October 2022, and an important contract with AGGIA. When sales are combined, Sadot’s six-week period from mid-November 2022 to December 30, 2022, saw revenue of almost $150.585 million. A 3% profit margin was achieved with a net income of about $4.55 million. The overall revenue for GRIL in 2022 was $161.7 million, a significant increase from the total revenue in 2021 of $10.35 million. Net loss per share for the company decreased from 50 cents in 2021 to 28 cents in 2022.

Although the profit margin is small (3%), the significant income raised by expanding the company’s objective could lead to successful outcomes in 2023.

With a share price of $1.03, GRIL is still a micro-cap stock. When compared to micro-caps trading on the over-the-counter market, the company’s shares trading on Nasdaq offers some comfort. But the likelihood of losses is always a function of the likelihood of benefits.

Companies with increasing revenues and earnings give the highest chances for success in today’s risky stock market environment. Keep an eye on GRIL since it seems to be moving in the right direction towards diversification, revenue growth, improving the likelihood of profits, and maintaining the upward trend of its shares. The current decline may be a fantastic buying opportunity.

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